The UK’s rapid rollout of Covid-19 vaccines has boosted SME confidence up and down the country, yet a quarter are still concerned they won’t survive past 2021, new research reveals.
A recent survey by leading SME insurer Simply Business reveals that 65% of small business owners believe the successful vaccine rollout is making them feel more confident about the recovery of their business. The findings come as the easing of lockdown restrictions gets underway, which saw thousands of English businesses reopen their doors on April 12th and many more eagerly awaiting to open on May 17th.
The significance of this confidence boost is material given small businesses account for 99% of all businesses and generate a combined £2 trillion in turnover annually. It’s vital for the UK’s economic recovery that small businesses survive and thrive, but with multiple lockdowns over the past year, it’s clear the SME community is likely to feel the economic effects of the pandemic for some time.
The sustained economic hit from the pandemic, which is set to cost SME owners over £126.6bn in total, has left a quarter (24%) unsure about whether they’ll be trading next year, despite the recent reopenings.
One in five (21%) also worry they will have to permanently close their business in 2022 or later, and half (48%) still live in fear of future lockdowns given the consequences it could have on their business.
Despite the toll the pandemic has taken on small businesses, there remains hope. A quarter (25%) believe they will return to pre-pandemic levels by spring or summer 2022. Well over a tenth (14%) think faster, and predict they’ll be back to normal trading levels by the end of this year.
Furthermore, a third (35%) of SME owners overall feel optimistic about the future. While businesses have been closed or running at reduced capacity, business owners have been able to use the past year positively. Well over half (56%) have also been able to spend more time with family where possible, one in three (32%) have been able to rest, and a further third (29%) have been able to focus on themselves, as small business owners reset ahead of reopening.
Additionally, almost one in five (17%) have learnt new skills, and one in 10 (11%) have been able to adopt new digital technologies into their business.
Alan Thomas, UK CEO at Simply Business, comments: “The level of confidence the vaccine rollout has instilled in small business owners is encouraging, especially after such a tough year for trading. But it’s clear SMEs will be feeling the effects of the pandemic for some time. Over a year on, and despite some restrictions beginning to ease, it’s telling that half of small business owners still live in fear of future lockdowns and the fatal consequences it could have on their business.”
“Small businesses are the lifeblood of our economy and will be at the heart of our collective recovery. Behind every small business is a small business owner – with families, livelihoods and big dreams. The impact of the pandemic on so many of these individuals has been devastating, both financially and emotionally. So it’s crucial we all continue to support the small businesses in our communities as they reopen.”
Simply Business has launched a Covid-19 support hub, to help small businesses, landlords and the self-employed to quickly navigate uncertainty, and determine what financial support and schemes are available to them during the coronavirus pandemic.
The financial support checker tool from Simply Business is free to use and takes SME owners just a few minutes to complete - pointing them towards relevant government financial support they might be entitled to.
Data: Survey of 1,206 small business owners from across the UK, conducted March 2021, after the government had announced its roadmap out of lockdown (February 2021).
How did we calculate the £126.6 billion figure?
94% of SMEs surveyed say Covid-19 will affect them financially
We asked small businesses how much they estimate the coronavirus pandemic will cost them in total, including lost earnings, jobs and revenue. The weighted average of this cost is £22,461
94% of the total no. of SMEs in the UK (6 million), multiplied by average projected total cost (£22,461) = £126,680,040,000.
Launched in 2005, Simply Business provides an online brokerage service, delivering policies tailored to individual business requirements. Using the power of tech and data to create the best possible customer experiences, Simply Business employs over 800 people across offices in London, Northampton, and Boston in the US.
Owing to its internal underwriting capability, Simply Business can cover over 1,000 trade types – ranging from plumbers to accountants to dog walkers. An accredited B Corp for their positive social impact, Simply Business has also been voted the Sunday Times Best Company To Work For twice in a row.
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